Only Rivers and Lagos States are Economically Viable for New States

Researchers at the Nigerian Institute of Social and Economic Research,NISER, Ibadan, say only Lagos and Rivers States are viable to justify creation of new states from them. NISER, in its latest research findings, indicated that majority of the thirty-six states generated less than ten per cent of their total revenue.”Only Lagos State generated more than 23 per cent of its total revenue. On economic viability of states as presently constituted, results reveal that only Lagos and Rivers states had Internally Generated Revenue (IGR) to Recurrent Expenditure (RE) ratio of above 50 per cent.

“No other state had IGR to RE ratio anywhere close to 50 per cent. Further analysis conclusively indicates that economic viability does not feature in the prevailing clamour for new states ” the report stated.

Among the recommendations of the Institute was that economic viability should be the major consideration in state creation. It said the creation of new states out of the existing ones should be considered only if existing states from which the proposed ones would be created were economically viable.

Apart from this, the Institute advised that states should take advantage of their natural resource endowments to diversify their revenue base. “Employment generation should be accorded priority.

“ The multiplier effect of employment generation is increased tax base which should enhance the revenue base of the states and, if efficiently utilised, will enhance the viability of the states” the report said.

The report also noted that the increasing demand for new states in the country and anxiety over the viability of existing ones remained a paradox. It said that there was currently a demand for creation of 42 states even as the existing states could hardly implement the minimum wage of N18,000 for workers in public and private sector as provided by the law as at March 2011.

Source: OgoniNews

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